There are a significant number of landowners benefitting from the recent jump in farmland values. However, there is a segment of absentee landowners that is missing out on maximum profits due to a lack of market understanding, according to agricultural real estate experts who track market activity.
As land values move up quickly, many absentee land owners are falling behind the curve in private property sales. According to Lee Vermeer, AFM, vice president of real estate operations at Farmers National Company, nearly 20 percent of private treaty sales transactions are in this category. He says the numbers keep increasing and the gap widening as values in the open market are rising.
"Our appraisers come across numerous sales in almost all states and counties that have sold well below the current market," said Vermeer. "Examples of farms that have sold at $500 to $1,000 per acre below the market are common and instances of $2,000 below the market have been found. If a landowner sells 160 acres at $1,000 below what they could have received if offered to the open market, they will lose $160,000. This scenario happens often in this rapidly changing market."
Vermeer advises absentee landowners to keep current on market trends and sales data, even if they are not currently looking to sell. He says it's vital to seek regular advice from a professional land real estate company, and track state and county sales online at a website such as www.FarmersNational.com where landowners can keep apprised of market changes that affect land they own.
"You never know when an opportunity to sell could arise, and knowing the market puts a landowner in an optimum position, and knowledge is always valuable," said Vermeer.